IRS Paid Executives To Live In Luxurious DC Hotels

Former IRS Chief Technology Officer Terry Milholland lived in Texas, but most weeks flew to Washington, D.C., and slept at the Grand Hyatt downtown — all on taxpayer dime, according to a new report on IRS travel spending.

The Senate Committee on Finance report — first obtained by Fox News — found a handful of IRS officials don’t live where their primary job responsibilities are, so the tax agency paid hundreds of thousands of dollars for 15 people to live in expensive hotels or apartments in U.S. cities for a chunk of fiscal year 2015. The IRS had 27 employees who traveled 125 business days or more that year for a total of $1.4 million.

“Although the IRS has a number of employees who travel more than half of the fiscal year, the IRS has not routinely taken the steps allowable to reduce its travel-related per diem expenditures,” the report said. “Furthermore, despite having instituted internal guidance limiting executive travel and realigning executive posts of duty in FY 2013, the committee found evidence that some executives are still not geographically located where their primary job duties are.”

“However, if the IRS would follow its own internal guidance without exception and institute best practices from other agencies, it could see significant cost savings among all employees who travel for significant amounts of time during the year, not just those traveling for more than half of the year,” the report added.

The IRS spent $55,185 on Milholland’s travel in fiscal year 2015, including $18,420 for lodging, $7,761 for meals and other incidental expenses, $2,538 for airport parking, $1,146 for mileage and tolls, and $1,572 for taxis. Milholland, appointed IRS CTO in 2008, left in July, 2016, when funding for his position expired.

IRS policy allows executives to spend up to $7,099 per month for lodging alone when traveling to D.C., but encourages executives to seek cheaper options. The report called many expenditures “excessive” and “inappropriate.”

Long-term travel habits incurred other costs, too.

The report found executives also charged expense accounts for things like dry cleaning and cable bills. One unnamed employee expensed taxi trips to and from grocery stores and restaurants, despite staying within walking distance of restaurants and grocery stores.

“While many of these expenses are technically allowable, the committee believes that they violate the traveler’s responsibilities laid out in the IRM (Internal Revenue Manual) to exercise the same prudence and economy when incurring expenses on official travel as one would when traveling on personal business,” the report said. “In both the housing selected as well as the additional miscellaneous expenses incurred, IRS employees rarely appeared to follow these responsibilities laid out in their own manual.”

The Department of Treasury Office of Inspector General (TIGTA) found similar problems in a 2013 audit of IRS travel, but the situation hasn’t improved, the Senate report said.

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